Income Inequality and Society

Income Inequality in America is a problem that’s been going on for decades, and many feel that it hardly exists, the many people that feel that way are highly uneducated, and seem to not really care about this tremendous problem that in one’s eyes really has no end in the near future, in fact it has been gradually rising and one feels that it’s just not fair. Unfortunately, there’s not much that can be done, only of course if the poor class of people decide to actually educate themselves and get a higher education. One says poor class, simply because that’s how they’re classified. There are five types of levels that Americans are classified as, and they are: 1. Upper Class, 2. Upper Middle Class, 3. Middle Class, 4. Working Class, 5. Poor.

Combating the wealth gap is tricky business and because the income gap is so wide, it would require more than two presidential terms or one straight forward policy to fix it. Income inequality and economic growth have a positive correlation meaning the economy cannot maximize its growth potential if income inequality is high, so there are two ways to approach this issue; one being from the economy and business side to increase economic growth and hopefully stabilize income inequality and two being to tackle the wealth gap directly to promote economic expansion. The latter would tackle the problem head on but would require more work while the first option is not a guarantee fix and could make the problem even worse. The only sure fix would be to close the income gap directly to promote economic wellbeing. Two options that could be explored to do so would be; one: use government intervention to further shape market forces

The issue of income inequality in the United States is complicated and does not have a definite answer. Income inequality can be measured in a few different ways. The first measurement for the income inequality in a country is to look at the percentages on households and group them into income categories, called distribution by income category. The second measurement for income inequality is called distribution by quintiles or fifths. This is when you divide the total number of people, households, families into five groups called quintiles to examine the percentage of total before tax income received by each quintile. Each quintile would then be ordered by income and households in the category.

Nowadays, the middle class is shrinking, while majority of people are either moving into the lower or upper classes. This is due to the major economic and policy changes that have occurred throughout the past thirty years. Based on the Basic Economy Security Tables, one in four full-time working-age adults are not earning enough income to meet economic needs for themselves or their families. This is a serious problem in America today, the fact that the median income today is six hundred dollars less than it was in 1989 is proof of this epidemic. It is much harder now, than ever, to work your way into the middle class, much less stay there. The percentage income growth since 1967 for the top 5 percent of earners is 88%, top 20 percent of earners grew 70%, and middle-income households only grew 20%. (Camp) In simpler terms, the upper classes income has increased tremendously, while middle-income households have seen very little growth in their income. Since the middle class is not receiving any income growth, it is declining and moving towards the lower class. It is not nearly as easy as it was thirty years ago to get a decent job and make

In Robert Reich documentary “Inequality for All” he makes a compelling discussion about the serious crises that the United States faces due the widening economic gap. He looks to raise awareness of the U.S. economic gap between the rich and poor. According to Reich the widening divide in America is real and growing. Income levels at the middle and labor class is stagnant and are at it’s lowest levels compared to upper class incomes since the beginning of WWII and is growing wider each year. Reich suggests that the economy runs more smoothly when the middle class has jobs with fair wages, when unions are strong, and when middle class workers have some extra money to spend if possible when the government uses the tax policy properly and when it raises the minimum wage regularly to control the income gap between labor and management. In other words Reich argues that economically healthy middle and labor class equality is the foundation of a thriving economy and is necessary to maintaining a sound national infrastructure and educational system within

Since the early 1980s in the United States, there has been a big push advocating for tax cuts benefitting the wealthiest Americans at the expense of investing in education, infrastructure, child care, and income supports that would help raise well-off children to be productive adults. As a result of this, the gap between the rich and the poor has grown wider, making the wealthy more willing to sacrifice overall economic growth in exchange for the larger share of money that they are getting for themselves. This has led to severe income, racial, and poverty inequality in the United States and creates an inequality trap because as the rich get wealthier, they favor policies that earn them more money and power at the expense of the low-income workers education and well-being.

The United States is the richest country on Earth. Free-market advocates promise this prosperity to span over all socio-economic classes, but it simply has not. The American middle class prosperity is a fantasy. Like my family, many middle-class Americans are facing massive inequality, jobs losses, and a continuous increase in the amount of debt accrued. While the United States is home to the most billionaires and millionaires in the world, the wealth of our middle class is ranked 27th globally. For decades their have been a series of economic and societal transformations leading up to the development of the middle class and the turmoil it has left families in, such as my own.

President Barack Obama made it clear that income inequality was going to be a big priority, “the combined trends of income inequality and decreasing mobility pose a fundamental threat to the American dream, our way of life, and what we stand for around the globe... I believe this is the defining challenge of our time.” The president said the words income inequality 26 times during that speech which everyone took to mean one thing: an all out assault on income inequality. Instead, President Obama immediately backed down shifting strategy on attacking income inequality because Democrats are split on the issue leaving Obama to shift talk away from the subject. Our President can’t talk about income inequality and our politicians are afraid to bring it up for fear of branding themselves in “class warfare”. Income inequality has just become another topic of conversation we prefer to avoid in America like Japanese internment camps and the record high imprinsonment in America.

Republicans praise the middle class but preach that giving the wealthy tax breaks will give us all relief in return. Which leads us all to ask, what is the true cause of middle-class suffering? In this analysis, I have selected “The Phantom Menace: What War on the Middle Class” by Clive Crook and “A TED Talk on Income Inequality” by Nick Hanauer for comparison. These readings place focus on issues within the middle class in America. Hanauer appears to think that low wages and unfair taxation are the main culprit of middle-class struggle. However, Clive Crook feels strongly that these economic inequities are so small compared to other growing problems for the middle class. Nick Hanauer holds a valid point about income inequality being an important issue, but I am not convinced it is the largest problem the middle class faces. Clive Crook’s article leads me to believe a stifling combination of broken social systems and having a class-based system in general are more troubling for Middle-Class America than economic inequality itself.

Hence it is clear, income inequality shook middle class citizens unpleasantly. To improve upon the issues middle class Americans suffering, there needs to be necessary changes to make it possible. However, these changes will doubly happen anytime soon. Possible solution to combat income inequality affecting middle class are: strengthen the unions, raise minimum wage, reduce debt burden for college students, improving education system, modifying tax codes, corporate or big business tax going to communities and public facilities, middle class income should be raised to fit with the inflation or cost of living, government should intervene with deregulation policies if a threat to public’s interest, and modify health care system. These are some

President Obama (2013) defined soaring economic inequality as “the defining challenge of our time.” His claim does not go without backing: the current disparity between the wealthy and the working class is the largest it has been since the Great Depression (DeSilver 2013). The middle class, even adjusting for household size, has not seen a raise in over fifteen years (O’Brien 2014). Given, unemployment has decreased, but what of the part-time workers who yearn for the fresh delicacy of full-time employment? They are not receiving the platter of fresh strawberries, juicy steaks, and mouthwatering chocolate fondue to which they are entitled. During the first three years of the recovery, the top 1 percent of earners had seized 95 percent of gains, or ‘platter’, making times rough for those who were hard strapped for cash. (Matthew 2013). With student loans just hitting $1.2 trillion, an increasing wave of individuals indenture themselves to their bank in order to just linger in the middle class (Chopra 2013). The three preeminent methods we can use to combat this emerging economic disparity are self-evident: with the combination of reforming our tax code to benefit the impoverished, inducing a growth in skill-based careers, and creating an educational system which is both economical and practical for the masses, the economic disparity might just bridge itself.

US News and World Reports, 1 May 2015. Web. 29 October 2015. I came across a very eye-catching article on the U.S News by Suzan Milligan. Her main concern was instead of increasing the amount of money the rich make, figure out why the economic gap is occurring and fix it so that we ARE equal. She is very aware of how much the middle class contributes to the economy compared to the rich who does not.

A major social problem in America today is its inequality of the distribution of income. "Income inequality refers to the gap between the rich and the poor. The United States has the most unequal income distribution in the industrialized world, and it is growing at a faster rate than any other industrialized country" (Eitzen & Leedham, pg. 37). The main reason as to why income is distributed so unequally is because of the gap between social classes.

Over the past decades income inequality has risen. Throughout history there have been several economic crashes caused by a high rate of income inequality. During the 1980’s, Ronald Reagan implemented Reagonomics, which essentially cut taxes, government regulation and social programs and increase military spending. Reagan cut taxes from a top rate of 70 percent to about 28 percent for a single person making 18,000 or more. There have been several discussions on whether Reaganomics was successful on growing the US economy. For the most part, Reagans economic plan stopped the recession but it did not uphold all the promises that Reagan made. In our modern day, taxes have been kept quite low, but

Income inequality has been a major problem facing American society for decades, but has recently become a major concern. I personally believe the major gap between the income of the rich and poor is a not just, but is not a major concern for the government and society. If the Federal Government addresses other major concerns facing American citizens the inequality will be adjusted due to other changes. The government needs to step in and adjust minimum wage and public education. If the government